Carl Menger

Carl Menger (23 February 1840–26 February 1921) was the founder of the Austrian School. He is most famous for the theory of marginal utility, but made many more important contributions, including to the theory of prices and was instrumental in the so-called Methodenstreit, a dispute about the proper methods of the science of economics.

In his book The Origins of Money, Menger explains that it is not government edicts that create money but instead the marketplace. Individuals decide what the most marketable good is for use as a medium of exchange. "Man himself is the beginning and the end of every economy," and so it is with deciding what is to be traded as money. Menger developed a complete theory of social institutions arising from interactions among humans, each with his own subjective knowledge and experiences. It is the spontaneous evolution of these human actions that create institutions whereby individuals discover certain patterns of behavior that aid each person in attaining his goals more efficiently. Nothing is more central to this evolution than the development of money, making the division of labor possible and satisfaction of wants attainable.
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